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Kodak Theatre owners seeking government money for Cirque du Soleil renovations

It's an old Hollywood story: a well-liked performer with a pretty face who just can't deliver the goods every time.

In this case the performer is the Kodak Theatre, glamorous temple of the Academy Awards seen one night each year on television by millions of people. But on far too many other nights, the vast theater tucked into the Hollywood & Highland shopping center is dark and not generating revenues or taxes, its operators say.

The development company CIM Group, which owns Hollywood & Highland and runs the Kodak, says it could strengthen the theater and buoy tourism revenues in Hollywood by signing the famed acrobatic troupe Cirque du Soleil to a long-term contract.

But that would mean $50 million in renovations, and CIM wants to fund part of that with a federal job-creation loan, obtained through the city of Los Angeles. The City Council is scheduled to vote today on whether to sponsor the $30-million loan, which supporters say would earn the city $500,000 in administrative fees.

Comments () | Archives (4)

So we are cutting personnel in the LAFD, BUT we are spending $30 million to help the Kodak theater host Cirque du Soleil? Am I missing something? These stories appear today on the same front page in the LA Times on-line and I am just really, really, really confused. While I do not always get the processes that happen when making these sorts of decisions, you know the big picture, I just cannot believe that the Kodak Theater will get $30 million while we are cutting back the budgets with all sorts of social services, educational programs and personnel in LAFD.

I just do not get these decisions and I never will no matter how someone or who tries to explain this bigger picture to me. This is unreal. Unreal. Unbelievable.

It's rather simple, actually. The Fire Department costs money and will never produce a profit. The Kodak Theater has the potential to generate revenue and tax monies for the city. Politicians are interested only in cash paybacks and corporation profits, not public safety or social issues. It's a not brainer when you consider the fiscal returns.

The Kodak Theatre is owned by the privately held CIM Group. CIM Group is basically a real estate fund manager that makes private equity and/or debt investments in urban communities. As with any privately owned investment firm, its mission is to maximize returns while mitigating risk.

During a time of severe economic distress for Los Angeles, I can't imagine the justification for investing $30 million into a potentially risky loan to maximize returns on a private investment. If CIM Group needs a loan to fund renovation of the Kodak Theatre, they should consider attaining it the way that other business ventures are funded - through private investors and lenders. If these private sources deem this to be too much of a risk without a significant return on investment, then so should the City of LA. While I understand that they City is sponsoring a loan through the Federal Job Creation programs (so, it isn't too much money out of our general city funds), the City should instead consider sponsoring internal projects that would be accessible to tax payers. The cost of attending Cirque du Soleil at the Kodak Theatre is prohibitive to the majority of Angelenos. City and Federal monies should be first invested in infrastructure and necessary public services - keeping jobs in these areas would much further serve the city than a few construction jobs funded under this proposition.

Having watched the Academy Awards for many years, I was very disappointed when the location was changed from the Shrine Auditorium to the Kodak Theatre. Also being a theatre "buff", I'm very cognizant of the newer venues which often endanger the continued use, or reuse, of "older" auditoriums.
Perhaps the decisions involving the creation of the Kodak did not go deep enough to evaluate whether such a tremendous financial envestment really made sense (or cents).
My wife and I no longer attend the Cirque performances held each year in Philadelphia, near where we reside. The shows are fantastic, but they are also expensive. If I were to visit Las Vegas, Cirque would not be on my list of things to do. I would feel the same if Cirque was enshrined in the Kodak. Just too much money.
Considering the long term financial difficulties that face LA, all of California, as well as the rest of the USA, I find it difficult to understand how such an expenditure (modification of the Kodak) can be legitimately justified, when "essentials" are being ignored, or at the very least "put on the back burner".
I guess that's why Los Angeles is referred to as "Lala land".
Good luck.


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